RFIDs in Supply-Chain Management

Writes Information Week:

When applied to pallets, cases, or even individual items, RFID tags can give suppliers, manufacturers, distributors, and retailers unprecedented control over inventory, shipping, and other logistics. The real-time data generated by the tags as products move along a route could help businesses make faster decisions, increasing efficiency and productivity in many areas, including how invoices and payments are handled. For instance, when a loaded pallet enters a retailer’s warehouse, the RFID tag’s signal could trigger an electronic payment to the shipper, rendering invoices obsolete, says Simon Ellis, supply-chain futurist at Unilever.

The concept has been around for decades, but its application has been held back in part by the expense of the tags, which ranges from just under $1 to $20. Now the potential cost has dropped to about a nickel, as sponsors of the commercially funded Auto-ID Center at Massachusetts Institute of Technology have figured out ways to produce cheap chips in quantity based on developing standards. “You need volume,” says Kevin Ashton, executive director of the Auto-ID Center. “If you produce them in the billions, it’ll cost as little as 5 cents.”

RFIDs are going to play a key part in helping build out the feedback-driven real-time universe, as envisioned by Malone.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.